Stocks Radar: Reliance Industries, Jet Airways, UltraTech Cement, Yes Bank
The Indian equity benchmarks opened lower following Asian peers, which posted further losses after another slide in the U.S. The S&P BSE Sensex and the NSE Nifty 50 Index fell more than 1 percent to trade at 34,357.50 and 10,307.10, respectively, as of 11:10 a.m.
The market breadth was tilted in favour of sellers. All of the 11 sectoral gauges declined, led by a 2.81 percent fall in the NSE Nifty Media Index.
Here Are The Stocks Moving The Market This Morning
Hathway, Den Networks Mixed After Reliance Agrees To Buy Stake
Shares of two of India’s largest cable and wired internet services providers opened mixed in early trade after Reliance Industries Ltd. agreed to buy controlling stakes in the companies. Hathway Cable gained as much as 10.2 percent to Rs 32.45 apiece, while Den Networks fell nearly 5.3 percent to Rs 72 apiece.
Reliance Industries plans to acquire a 51.3 percent stake in Hathway Cable for Rs 2,940 crore and a 66 percent stake in Den Networks for Rs 2,290, according to the oil-to-telecom conglomerate’s exchange filing. It will also make an open offer to existing public shareholders of the companies.
Hathway Cable is among the top gainers on the NSE 500 Index, according to Bloomberg data.
Jet Airways Soars On Report Of Tata’s Plan to Buy Stake
Shares of the airline rose as much as 8.4 percent to Rs 234.90 apiece.
Tata Sons Ltd. is considering acquiring a stake in crisis-hit Jet Airways (India) Ltd., PTI reported quoting anonymous sources. The diversified Tata Group already owns majority stakes in two airline joint ventures—Vistara and AirAsia India.
The stock has fallen 72.5 percent so far this year compared to a 2.3 percent gain in the Sensex, according to Bloomberg data.
Also read: Boeing ‘Concerned’ About Jet Airways
Yes Bank Falls After RBI Denies Request For Extension Of Rana Kapoor’s Term
Shares of the private lender declined nearly 5.1 percent to Rs 220.10 apiece.
The Reserve Bank of India has reaffirmed that a successor to Rana Kapoor, managing director and chief executive officer of Yes Bank, should be appointed by Feb. 1, 2019, the lender said in its exchange filing. Yes Bank’s appointed selection committee is looking to complete the recruitment process latest by mid-December this year.
The stock has fallen 27 percent so far this year, Bloomberg data showed.
Reliance Industries Slumps Most In 2 Weeks After Q2 Results
Shares of the Mukesh Ambani-led company fell as much as 7.1 percent to Rs 1,070.25 apiece even as the company’s profit for the quarter ended September met estimates, backed by a strong performance by its petrochemicals business.
Net profit of the company rose 0.4 percent over the previous three months to Rs 8,859 crore in the July-September quarter, according to its exchange filing. That’s in line with BloombergQuint’s estimate of Rs 8,853 crore. Profit of its telecom arm, Reliance Jio Infocomm Ltd., too rose on the back of strong subscriber additions.
Brokerages also maintained their stance on the oil-to-telecom conglomerate amid a weakness in its core refining business.
The stock is the worst performer on the Sensex and the Nifty, according to Bloomberg data.
Other Key Highlights (Quarter-On-Quarter)
- Revenue rose 5.5 percent to Rs 96,167 crore.
- Ebitda down 1.7 percent to Rs 14,892 crore.
- Margin stood at 15.5 percent against 16.6 percent.
- Gross refining margin stood at $9.5 a barrel compared with $10.5 a barrel.
UltraTech Cement Slips Ahead Of Earnings
Shares of the cement maker fell as much as 4.2 percent to Rs 3,565.05 apiece ahead of its earnings announcement for the quarter ended September.
- Revenue is expected to rise 20 percent to Rs 7,873 crore.
- Net profit is expected to fall 3 percent to Rs 418 crore.
- Ebitda is likely to decline 2 percent to Rs 1,328 crore.
- Operating margin is seen at 17 percent compared with 20.6 percent.
The stock trades 40.3 times trailing its 12-month earnings per share and 32 times its estimates for the coming year, Bloomberg data showed.
Housing Finance Companies Decline As Moody’s Sees More Pain
Shares of housing finance companies declined in early trade after rating agency Moody’s said the sector should brace for tougher times.
Indiabulls Housing Finance declined as much as 10.6 percent to Rs 705.20 apiece, while PNB Housing Finance fell close to 7.5 percent to Rs 800 apiece, according to Bloomberg data.
Moody’s Investors Service in a research report said that the liquidity tightness for non-bank lenders could lead to higher financing costs or even difficulty in rolling over liabilities for NBFCs as they rely heavily on market borrowing to fund asset growth.
Mindtree Slumps Most In Over 7 Years
Shares of the Bengaluru-based IT company fell as much as 18 percent, the most since September 2011, to Rs 801.10 after Citi downgraded the stock to 'neutral' after it announced September quarter earnings.
Key earnings highlights:
- Revenue up 7.1 percent at Rs 1,755.4 crore (QoQ)
- Net profit up 30.4 percent at Rs 206.3 crore (QoQ)
- EBIT up 21.9 percent at Rs 229.5 crore (QoQ)
- Margin at 13.1 percent versus 11.5 percent (QoQ)
Citi downgraded the stock to 'neutral' from 'buy' and cut target price to Rs 1,090 and said that September quarter was weak and open a negative catalyst watch. It expects stock to correct given high expectations and sudden change in management commentary.
More brokerage views
- Maintained ‘Neutral’; cut price target to Rs 1,020 from Rs 1,070, implying a potential upside of 4 percent from the last regular trade.
- Muted revenue performance led by top client.
- Remain concerned about increasing dependency on top client.
- Expensive valuations leave limited upside from current levels.
- Maintained ‘Neutral’; cut price target to Rs 1,000 from Rs 1,160, implying a potential upside of 2 percent from the last regular trade.
- Disappointing quarter considering strong exit rates of June quarter and a weaker rupee.
- Management expects December quarter’s margins to be better, but revenue growth similar to that of the second quarter.
- Revenue and margin miss doesn’t bode well for multiples.
- Maintained ‘Buy’; cut price target to Rs 1,125 from Rs 1,260, implying a potential upside of 15 percent from the last regular trade.
- Revenue miss; Cautious macro commentary in contrast to current sector mood.
- Customers engaging in short term contracts given uncertainty around Brexit.
- Soft commentary for near term will weigh on the valuation multiple.